Morgan Stanley Acquires E*TRADE After Fed’s Approval


Morgan Stanley has closed its acquisition of discount brokerage E*Trade, the investment bank announced Friday. Morgan Stanley has received approval from the Federal Reserve to acquire discount brokerage.

October 5, 2020 | AtoZ MarketsNew York-based Morgan Stanley has announced that it has completed the acquisition of E*TRADE Financial Corporation an all-stock transaction. The all-stock deal — valued at $13 billion when it was announced in February — gives Morgan Stanley a new consumer-focused arm amid a boom in retail trading during the coronavirus pandemic.

“The addition of E*TRADE positions us as an industry leader in Wealth Management across all channels and segments, and significantly increases the scale and breadth of our Wealth Management franchise, which now oversees $3.3 trillion in assets,” said James P. Gorman, Chairman and Chief Executive Officer of Morgan Stanley. “E*TRADE has built a best-in-class, direct-to-consumer digital channel and a strong brand over the past 38 years. The addition of their premier offering will provide enhanced capabilities to all our clients and Financial Advisors.”

Morgan Stanley’s shares climbed following the acquisition of E*TRADE

Following the news of Morgan Stanley’s acquisition of E*Trade, shares soared as much as 1.3% to $47.89.

The finance giants sealed the deal two days after the Federal Reserve gave the green light for the acquisition. Per the announcement, E*TRADE common stockholders are entitled to receive 1.0432 Morgan Stanley common shares for each E*TRADE common share.

E*Trade will continue to offer commission-free trades under its own brand, and CEO Michael Pizzi will continue to lead the platform as a Morgan Stanley employee.

E*Trade board member Shelley B. Leibowitz has also joined Morgan Stanley’s board. She previously worked as the bank’s chief information officer and brings an extensive cybersecurity and technology background to the table.

Read also: OANDA Announces Acquisition of Polish Brokerage TMS

The deal closed after a flurry of growth for E*Trade as locked-down investment novices took to trading stocks amid the pandemic. E*Trade added 327,000 retail accounts in the April-to-June quarter. As a result, its daily average revenue trades climbed to a record of more than 1 million.

About Morgan Stanley

Morgan Stanley is a leading global financial services firm providing investment banking, securities, wealth management, and investment management services. With offices in more than 41 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions, and individuals.

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